The Next Trillion Dollars

What in the world would cause business leaders to allocate another trillion dollars to enterprise IT in the next decade? Quite simply, the prospect of gaining ten trillion dollars by so doing.

This is the fundamental equation of enterprise IT spending. If you want customers to give you a dollar, you must give them ten dollars in return, be that from new market opportunities to exploit or productivity gains from existing operations. Both these types of gain are best understood in terms of detecting and then releasing trapped value.

Let me give some examples. In the 1980s there was enormous trapped value in manually intensive office paper work; office automation, especially word processing, spreadsheets, and email, became the mechanism by which that value was released. In the 1990s there was enormous trapped value in redundant functionality replicated inside every corporation, especially in relation to manufacturing and customer service transactions; enabling outsourcing to release that trapped value became the fuel the drove the client-server ERP revolution. In the 2000s there was enormous trapped value in media and entertainment being confined to a handful of publishers and physical distribution to tethered endpoints; this drove the deployment of wireless broadband networks, mobile devices, and electronic distribution.

These were all decade long trends that have now settled into our core infrastructure, at least in developed economies. But the quest for releasing trapped value never ceases—the location just migrates. Today we are in the midst of one great new trend, based on enterprises of all kinds deploying Systems of Engagement (SOEs), and on the cusp of an even greater one, based on machine learning fed by data from the Internet of Things to power Systems of Intelligence (SOIs).

The amount of trapped value available for SOEs to release is readily grasped once you realize that a ubiquitously available, always accessible smart phone is standard equipment for every consumer, citizen, student, patient, employee, manager, service worker, parent and child. These phones put the power of an IBM 370/158 mainframe in everyone’s pocket or purse. Given that capability, given the amount of errors, the persistent misunderstanding, the wasted training, and the interminable customer support sessions that accompany deploying core-to-edge interactions, wouldn’t one want to reengineer every single one of them? The answer to that question is yes. The amount of trapped value to be saved is in the trillions of dollars, and thus there is enormous opportunity for any company who can facilitate this outcome.

As big as the impact of SOEs will be, once they are deployed, once they start feeding their logs into Big Data stores where they can be crunched by data scientists and machine learning, they will reveal a whole new universe of trapped value to exploit. Today we simply don’t know what we don’t know—but that is not going to last for much longer. With the advent of SOIs, we will come to know what we don’t know, and once we do, we will detect the trapped value in our current methods, and we will direct the next generation of investment to release it. Today early adopters like Amazon and Google have demonstrated the staggering competitive advantages that can be secured by these means. That in turn has sent wake-up calls rippling through the established enterprises that compete with them, and this will accelerate the adoption of SOIs over the next decade.

So we have trillions of dollars in view. Now all we have to do is go get them.

That’s what I think. What do you think?

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Geoffrey Moore | Zone to Win Book | Geoffrey Moore Twitter | Geoffrey Moore YouTube